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Meanwhile, sales of cars manufactured in South Korea surged 18.9 per cent year-on-year in March, the fastest rise in five months, thanks to the government's plan to extend a tax cut scheme for auto consumers.

March car sales accelerated from a 9.0 per cent rise seen in February.

South Korea's economy is seeing increasing signs of recovery supported by policies like the auto tax cut scheme, improving exports and a rebound in sentiment, the finance ministry said, but it faces offshore risks like sluggish global growth and volatility in financial markets.